A Lease Option May Be The Answer

From the desk of C.J Lauria

Are you a real estate investor and are looking to maximize your returns in this wacky market?  More and more real estate investment experts are opting to go offer lease option contracts to selected tenants of their investment properties.

Today’s market climate has bred a near-perfect opportunity for those operating a real estate home business to create profits and help families to reestablish their homeownership status along the way.

Let’s examine some of the benefits of pursuing a lease option contract with your tenants:

· This is a quick way to sell your property at a fair price without waiting for tenants to leave and you then go in and prepare it for sale while it sits vacant.  Tenants under this agreement can simply move in and instantly take a pride of ownership approach to the care of your property.

· You won’t have to pay commissions to realtors.  As a rule, most of those fees can be avoided.

· You are creating a win/win situation for you and your buyer/tenant.

· You won’t have to worry about the losses of another vacancy.  Under this arrangement your buyer/tenant is responsible for maintenance.  If they chose to leave the option payments as well as down payment they paid you will be forfeited.  There’s your security.

· Never have to worry about late payments.  I like to include the contingency that all is lost if they are late…even one month.

· The buyer/tenant may not qualify for a mortgage loan at present.  This provision allows them time to build their credit in order to get qualified so they can complete the purchase.  In the meantime, you are collecting better-than-average rents.  In fact, your buyer/tenant may have been a homeowner for years and is faced with credit issues from a short sale of their family home.  Getting any ideas on how you might advertise??

Lease options are yet another reason I love real estate investing so much.   It’s also part of my real estate mentoring program as a profitable exit strategy.  Remember, you do not need to guarantee today’s prices for a transaction that actually closes in two years or more in the future.  The agreement can be made to settle the price at “fair market value” when they actually enter escrow.  Those numbers can easily be determined if your property is located in an area where there are multiple examples of “like kind” homes from which comparable values can be drawn.

While the real estate market bounces around bottom this year, it will be to your advantage to actually close the sale of your property when values have already started inching up.  The family you are helping, too, will benefit from an excellent opportunity for equity growth from the day they take title.  It’s fun creating win/win deals…isn’t it?